A ruling by the U.S. Supreme Court Thursday has given Joseph L. Bruno grounds to challenge his conviction on federal mail fraud charges last year, but prosecutors in Albany are suggesting they may argue to have that conviction upheld as a case where his actions proven at trial amounted to a "kickback" scheme.

While Bruno and his lawyers had hoped to see the Supreme Court overturn the "honest services" statutes used by the federal government to win a two-year prison sentence for New York's former Senate majority leader, six of the nine justices on the high court declined to do so.

Instead, they unanimously ruled that the law can only be applied to cases involving bribery or kickback schemes.

At the same time, in a major victory for Bruno, the Supreme Court declared that the vague "honest services" law may not be used to prosecute someone only for failing to disclose a conflict of interest, which was the bulk of the government's indictment against Bruno. Federal prosecutors in Albany, in response, vowed to continue to use the now more clearly defined honest services law as a tool to punish corrupt politicians.

Depending on the actions of federal prosecutors in the days and weeks ahead, the fate of Bruno, 81, could be settled quickly, or it could be months or years. His continuing legal defense costs could be modest or become enormous.

In an historic opinion written by Justice Ruth Bader Ginsburg, the Supreme Court declared that the honest services law re-written by Congress in 1988 and used widely since to prosecute many forms of white- collar crime, is unconstitutionally vague and should be limited to protect the "due process" rights of citizens. In Bruno's case the government did not explicitly allege Bruno received bribes or kickbacks, as the high court said must be shown, instead they focused their prosecution on allegations that he had failed to disclose money-making business relationships in his annual Senate financial disclosure filings.

Still, a definition of "kickback" in federal law cited by the Supreme Court in its ruling resembles many of the facts that convinced jurors to convict Bruno after his trial. Bruno received money from people or businesses that had an interest in using his legislative powers for their benefit, according to the government's case. Prosecutors had also accused the former senator of not only failing to disclose conflicts of interest, but of also violating the state's ban on gifts worth more than $75.

Gifts, as federal law defines it, are a form of kickback.

Bruno, who insisted after his conviction that the Supreme Court would find the statute unconstitutional, cheered the ruling.

"I have maintained faith and trust in the justice system since the very start and the Supreme Court's decisions rendered earlier today reaffirm that belief. We are in the process of reviewing the decisions before taking the next step in this legal process as we remain hopeful for a positive resolution," Bruno said in a written statement.

In a statement Thursday afternoon, U.S. Attorney Richard S. Hartunian said his office is still weighing how to react.

"The effect of the Supreme Court's ruling on Joseph L. Bruno's conviction is being carefully considered and will be addressed in future court filings."

The region's chief federal prosecutor, quoting Thursday's ruling, said "the Supreme Court held that the statute applies to 'offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes,' but ruled that it does not apply to 'mere failure to disclose a conflict of interest.'" Hinting at what his legal team may be thinking, Hartunian went on to note that the high court "quoted from a federal statute which defined 'kickback' as meaning 'any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind which is provided, directly or indirectly, ... for the purpose of improperly obtaining or rewarding favorable treatment.'"

"This ruling means that my office will continue to be able to use this important statute as we hold public officials accountable when they violate their bonds of trust with voters who elected them," Hartunian said.

Bruno was convicted last December on two of eight felony counts of theft of honest services mail fraud. Jurors failed to reach a verdict on one count and acquitted Bruno on five counts. He has appealed the conviction.

With Thursday's Supreme Court decision Bruno's attorneys are likely to quickly demand relief from the trial judge, U.S. District Court Judge Gary L. Sharpe, to ask that Bruno's conviction be vacated.

William J. Dreyer, Bruno's attorney, declined to discuss his interpretation of the Supreme Court action but said they are anxious to meet with Sharpe and federal prosecutors.

"We are attempting to meet with the prosecution and the court as soon as possible," Dreyer said.

Abbe D. Lowell, a Washington, D.C., lawyer who was co-counsel to Bruno with Dreyer, said the defense team had argued repeatedly that Bruno was being prosecuted under a law that was unconstitutional.

"We argued when the charges against Senator Bruno were first brought and many times since, that the honest service statute, under which he was indicted, was not constitutional," Lowell said in a statement. "The Supreme Court has now agreed. We look forward to pressing our claim again with the Justice Department and with the judge who tried the case."

Even if the conviction of Bruno is overturned federal prosecutors could seek a new indictment incorporating crimes that were not previously charged. However, any move by the government to bring new charges could be limited by a five-year statute of limitations.

In July 2008 Bruno abruptly resigned from the Senate position he had held for 32 years, including 14 years as majority leader. His exit from state government came as the FBI's investigation of Bruno's private business dealings was intensifying.

The eight-count indictment handed up in January 2009 accused Bruno of enriching himself through consulting deals with people who had an interest in his legislative decision-making.

On May 6 Bruno was sentenced to two years in federal prison but Sharpe, citing the Supreme Court's pending review of the honest services statute, said Bruno could remain free on his own recognizance until the Supreme Court's ruling Thursday. Bruno also was sentenced to pay $280,000 in restitution to the state of New York, the amount of money he gained in the two felony counts on which he was convicted.

The conviction of Bruno followed an aggressive FBI investigation that began in 2005 with an examination of free private jet flights provided to Bruno by a Loudonville businessman, Jared Abbruzzese. It was his dealings with Abbruzzese, who benefited from Bruno's legislative power, that were central in the two felony counts on which Bruno was convicted.

The trial of Bruno provided an unprecedented look inside the state Legislature, which has exempted itself from the state's Freedom of Information Law and set its own rules allowing the public only limited or no access to its ethics opinions and financial disclosure forms.

Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.